Gingrich is framing the issues for 2012. Will Republicans listen?
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Spending and Entitlement Reform
The Republican House should also take the lead on spending cuts now, without waiting for the deficit reduction Super Committee, by passing Appropriations bills that implement all of the discretionary spending cuts of the Ryan budget. Those cuts were based on the popular plan of returning all non-entitlement, non-interest spending for all federal agencies and departments back to 2008 levels.
Gingrich raises a popular entitlement reform opportunity based on the enormously successful 1996 reforms of the old Aid to Families with Dependent Children program (AFDC), enacted while Gingrich was Speaker of the House.
Those reforms sent the federal financing for the program back to the states in fixed, finite block grants, with states empowered to redesign new welfare programs for the poor — based on work. If a state’s program cost more than its federal allotment, then it had to pay all of the extra costs itself. If its program cost lest, then it could keep the resulting savings.
With new incentives for the states, two-thirds of those on AFDC left the program for real private sector jobs. Their incomes rose by at least one fourth as a result, leading them out of poverty. And costs for the taxpayers dropped by half or more in real dollars compared to prior trends.
Those same reforms can and should be extended to Medicaid and all other federal means-tested welfare programs. Those programs are estimated to cost $10 trillion in total government spending over the next 10 years. The Republican House should act now to pass legislation effectively sending all those programs back to the states with block grants providing the discretion for the states to each enact a completely new welfare system based on work, as Gingrich suggested. That kind of Tea Party federalism would be enormously popular, as would the potential savings of $5 trillion over 10 years. Based on the 1996 reforms of AFDC, the poor would benefit enormously as well.
Gingrich also proposes legislation to increase revenue from oil and gas exploration and drilling through sharply increased federal leases and permits. That could raise $150 billion over roughly 10 years, with more coming from increased economic growth due to more abundant supplies of low cost energy for businesses. Gingrich also proposes to sell federally owned land and other unused and environmentally insignificant federal assets.
Gingrich is also pioneering the application of proven business efficiency and waste cutting methodologies known as Lean Six Sigma to government programs and agencies. Instead of waiting for the dangerously centralized Super Committee to develop plans for remaking the entire federal government, Gingrich argues that all 435 members of the House in almost 200 committees and subcommittees should be involved in developing ways to apply Lean Six Sigma business principles to government management, with potential cost savings of over $5 trillion. Gingrich argues that another $700 billion to $1.2 trillion over 10 years could be realized by applying the fraud detection techniques utilized by credit card companies to root out fraud in Medicare and Medicaid.
The Republican House has another immediate opportunity: to pass legislation to counter the job-killing regulatory blizzard the Obama Administration is dumping on the American economy. The EPA is effectively imposing the cap and trade tax to counter imagined human-caused global warming, at an ultimate cost of trillions to the economy through soaring energy and electricity costs. The EPA’s plan would ultimately involve phasing out the coal, oil and natural gas industries entirely. The House should pass legislation to strip EPA of authority to impose such highly unpopular global warming regulation.
House Majority Leader Eric Cantor (R-VA) seems to understand the opportunity here, promoting legislation to overhaul the federal government’s entire regulatory process through the Transparency in Regulatory Analysis of Impacts on the Nation (TRAIN) Act and the Regulations from the Executive In Need of Scrutiny (REINS) Act.
If the Republican House can act expeditiously to pass all of these ideas, and send them on to the do-nothing Democrat Senate, then Republicans can take these issues to the people next year, clearly defined.
And they can thank Newt Gingrich for many of them.
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